TeleNav 2011 Annual Report Download - page 69

Table of Contents
Off-balance sheet arrangements
During fiscal 2009, 2010 and 2011, we did not have any relationships with unconsolidated organizations or financial partnerships, such as
structured finance or special purpose entities, which would have been established for the purpose of facilitating off-balance sheet arrangements
or other contractually narrow or limited purposes.
Recent accounting pronouncements
In January 2010, the FASB issued revised guidance intended to improve disclosures related to fair value measurements. This guidance
requires new disclosures as well as clarifies certain existing disclosure requirements. New disclosures under this guidance require separate
information about significant transfers in and out of Level 1 and Level 2 of the fair value hierarchy and the reason for such transfers, and also
require purchases, sales, issuances, and settlements information for Level 3 measurement to be included in the rollforward of activity on a gross
basis. The guidance also clarifies the requirement to determine the level of disaggregation for fair value measurement disclosures and the
requirement to disclose valuation techniques and inputs used for both recurring and nonrecurring fair value measurements in either Level 2 or
Level 3. The revised guidance was effective for interim and annual fiscal years beginning after December 15, 2009, except for disclosure
requirements related to Level 3 measurement. We adopted the revised guidance during fiscal 2010 and the adoption did not have a material
impact on our consolidated financial statements. The revised accounting guidance for the rollforward of activity on a gross basis for Level 3 fair
value measurement will be effective for us in the first quarter of our fiscal 2012, which commences on July 1, 2011. We do not expect the
revised guidance to have a material impact on our consolidated financial statements.
In May 2011, the FASB amended fair value measurement and disclosure guidance to achieve convergence with International Financial
Reporting Standards or IFRS. The amended guidance clarified existing fair value measurement guidance, revised certain measurement guidance
and expanded the disclosure requirements concerning Level 3 fair value measurements. The guidance is effective for interim and annual periods
beginning after December 15, 2011. Adoption of this guidance is not expected to have a material effect on our consolidated financial statements.
In fiscal 2011, we adopted revised guidance which supersedes certain guidance with respect to accounting for revenue arrangements with
multiple deliverables. The revised guidance changes the determination of when individual deliverables in a multiple element arrangement may
be treated as separate units of accounting and modifies the manner in which the transaction consideration is allocated across separately
identifiable deliveries. The revised guidance was effective for our fiscal year beginning July 1, 2010. The adoption of the revised guidance did
not have a material impact on our consolidated financial statements.
Interest rate sensitivity . The primary objectives of our investment activities are to preserve principal, provide liquidity and maximize
income without significantly increasing risk. By policy, we do not enter into investments for trading or speculative purposes. Some of the
securities we invest in are subject to market risk. This means that a change in prevailing interest rates may cause the fair value of the investment
to fluctuate. To minimize this risk, we invest in a variety of securities, which primarily consist of money market funds, commercial paper,
municipal securities and other debt securities of domestic corporations. Due to the nature of these investments and relatively short duration of the
underlying securities, we believe that we do not have any material exposure to changes in the fair value of our investment portfolio as a result of
changes in interest rates. Declines in interest rates, however, will reduce future interest income. A 10% appreciation or depreciation in interest
rates in fiscal 2010 and 2011 would not have had a material impact on our interest income or the fair value of our marketable securities.
Foreign currency risk
. Substantially all of our revenue has been generated to date from our end users in the United States and, as such, our
revenue has not been substantially exposed to fluctuations in currency exchange
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ITEM 7A.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK